FreeMarketDuck.com

Idaho's Weekly Journal of Local & National Commentary Week
2815

Boise, ID – From a
purely Economics perspective, taxation is its own worst enemy.

Why?

Taxation and
governmental intervention into the market destroys the very mechanism that a
market needs to survive: price formations that reflect true supply and
demand.

Think about it.
What is a price? How does it come about? Prices are qualitative exchange
ratios created by individuals freely buying and selling in the market. Each
trader values that which he is about to receive higher than that which he is
about to give up. (Money is just another commodity for temporary storage of
value.) In fact, trades take place not because the commodities being
exchanged are equal but precisely because the commodities are valued
unequally by each trader. Value does not reside within the commodity per se
(or labor per se, sorry Karl Marx) but rather value resides in the expected
service to be rendered by each recipient of the trade, the consumer.
(Economics Lesson 101A: If a million men dig a million holes in the middle
of the desert, they certainly will have expended tons of labor but rendered
no service to anybody. The value of their labor is a big fat zero. If,
however, the Rolling Stones spend 5 minutes to cut a CD such as “I Can’t Get
No Satisfaction,” they expend very little labor and yet can sell their
recordings for $50 million. Value lies in perceived “service rendered” by
the consumer. Whether that “service rendered” is considered frivolous is
simply somebody’s opinion and is of no concern to the functioning of free
market price formations. So much for the idea of equal pay for equal
work and Karl Marx’s Labor Theory of Value. Both are false economic
ideas, and for the same reasons.)

Therefore, when the
government intervenes into a market with, say, property taxes and other
regulations, it destroys the free market connection between true supply and
demand. Without this mechanism, markets start falling apart. Capital
cannot move toward shortages of supply because there are no real market
prices to tell you that piece of economic information. Or the other 70
trillion pieces of pricing information that the free market automatically
provides on a daily basis minute by minute through qualitative bid and ask
quotes. There are no humans, computers, or bureaucracies in the world that
are capable of performing these types of dynamic price formations that truly
reflect supply and demand. That’s why socialist nations and even the
Managed Economy of the U.S. have fallen into dislocations, dysfunctions,
recessions, and depressions. (Never mind the Fed Reserve’s pretended
management of a non-commodity money supply.) In effect, we have unwittingly
(well, some of us) destroyed our free market pricing mechanism. One of the
most stupid acknowledgments of this destruction is the Soviet Ministry of
Prices in the USSR trying to use U.S. Sears Mail Order Catalogues to come up
with commodity prices for the Soviet Union in the decades before its
collapse. Sounds stupid but they had no other means to determine prices
since, by definition, the Politburo destroyed their free market pricing
mechanism by outlawing capitalism.

So, from both an
empirical and an Economics Theory point of view, property taxes and
governmental intervention in general are not clever ways to finance our
common goals in society whether it’s for education, health care, or building
highways.

So why do we persist
in levying property taxes and deceive ourselves into believing that we can
bring about the common good through an obviously bankrupt idea? Why, for
example, is the Idaho House Committee for Taxation and Chairwoman Delores
Crow wasting three days – and many more weeks -- of public meetings to
discuss which property tax method is the best to beat ourselves over the
head with?

The simple answer is
because we have not paid attention to history. And most of us have not
studied free market Economics.

In summary, the real
problem is not property taxes. The real problem is government spending.
Spending based upon the false conclusions (empirical and philosophical) that
the government, the state, can somehow achieve our stated common goals of
providing services and commodities. Empirical observation and economics
(theory) prove this is not true and, yet, very few individuals will stop,
take a giant step back, and re-examine our basic premises of why we are
invoking taxation upon ourselves in the first place when we know that
private enterprise and the free market always does a better job.

The property tax is
not the way to go and our children’s education is much too precious to leave
in the hands of a huge state bureaucracy. – FM Duck